Parliament may ban no-show lobbyists

The European Parliament is considering barring lobbyists from several multinational corporations whose executives have refused to appear before a special committee investigating EU tax shelters, POLITICO has learned.

If the unprecedented plan is approved, lobbyists working for companies including Coca-Cola, McDonald’s, Amazon and Facebook could find their Parliament access revoked until they testify before the panel.

The retaliatory measure is the brainchild of MEP Sven Giegold of the Greens group, who has been angered by a number of no-shows at the hearings of cross-party, special parliamentary hearing on EU tax shelters in the wake of the “LuxLeaks” scandal.

“This is a shameful boycott of the European Parliament,” Giegold told POLITICO, after at least 11 out of the 17 company CEOs and presidents invited to testify declined to show up.

The executives cited either previous commitments or concerns that their participation could clash with a parallel investigation being undertaken by the European Commission.

Companies that send […] flimsy excuses should lose their lobbying access to the Parliament

“Companies that send […] flimsy excuses should lose their lobbying access to the Parliament,” said Giegold, who is a member of the assembly’s “special committee on tax rulings and other measures” (TAXE), which was established in February.

The Parliament assembled the 45-member panel after the European Commission launched investigations into tax rulings agreed between multinational companies and national authorities in Luxembourg, the Netherlands and Ireland earlier this year, amid suspicions companies had been offered sweetheart tax deals.

The special committee does not have the power to summon witnesses to its hearings, leaving the suspension of lobbying passes the only leverage Parliament has available to put pressure on witnesses to show up. This would be the first time Parliament has taken such action.

The chairman of the committee, French MEP Alain Lamassoure of the European People’s Party, confirmed that Giegold’s proposal has been backed by the committee’s co-rapporteurs and is now being considered by Parliament’s secretariat, although Lamassoure did not reveal the timing of the proposal.

If implemented, the rules would severely curtail the ability of companies — ranging from HSBC Bank to Fiat Chrysler and Philip Morris — to meet and contact MEPs by stripping them of their access to parliamentary buildings in both Brussels and Strasbourg.

Most of the companies listed have one or more lobbyists with parliamentary accreditation, which they use to meet MEPs. Fast-food retailer McDonald’s has one accredited lobbyist; Swedish furniture giant IKEA has four; tobacco company Philip Morris has six.

Other TAXE members have attacked Giegold’s proposal.

“[Giegold] may think an EP hearing should be put on a par with a criminal trial or a sovereign judicial inquiry, but I do not,” British Conservative MEP Ashley Fox said. “If [Giegold] wants to persuade companies that they will not get a fair hearing, then this is the right way to do it.”

Fellow committee member Bernd Lucke, a German MEP from the Europe of Conservatives and Reformists group, said he was also concerned that the “selection of companies invited to TAXE is not (and cannot be) comprehensive.”

It is not convincing why some companies should be blamed for not showing up at TAXE while others simply were lucky not be invited

“It is not convincing why some companies should be blamed for not showing up at TAXE while others simply were lucky not be invited,” Lucke said.

The establishment of TAXE was hotly contested, with far-left MEPs demanding a more powerful body — a “committee of inquiry” with greater powers to investigate national policy. The Parliament’s leadership rejected that request, citing legal concerns.

Parliament instead agreed to a “special committee,” which has no powers to compel companies to attend hearings. Giegold and others have argued that TAXE is ill-equipped to get to the bottom of the LuxLeaks scandal, a journalistic investigation based on Luxembourg’s confidential tax rulings between 2002 and 2010.

The investigation is politically sensitive because European Commission President Jean-Claude Juncker was prime minister of Luxembourg throughout the period covered by the LuxLeaks tax rulings.

The use of parliamentary passes to leverage attendance at TAXE hearings is also limited by the fact that not all companies that declined Parliament’s invitation have accredited lobbyists.

The next step to penalize recalcitrant companies would be to strike them from the EU Transparency Register, which is jointly managed by Parliament and the Commission. This would prevent lobbyists from meeting commissioners, their cabinets and departmental directors-general.

There appears to be little appetite for this kind of action on the part of the Commission, whose approval would be required. “The Commission hasn’t discussed the idea of taking a more ‘disciplinary’ approach,” a Commission spokesman said.

A number of companies contacted by POLITICO — including Philip Morris, Barclays Bank, Ikea, Coca-Cola and Disney — declined to comment on their decision not to attend the hearings or how a parliamentary lobbying ban would affect them.

However, Barclays said it has repeatedly offered to meet bilaterally with members of the committee and that its door “remains open” for dialogue.

Swedish furniture manufacturer IKEA told POLITICO it has “respectfully declined” the invitation to appear before two parliamentary hearings, but says it too is ready to meet with MEPs for a “broader, informal discussion later this year.”

TAXE members will meet again in Brussels on July 13 for what is billed as a hearing of finance ministers of EU member countries.

But again, the committee faces the prospect of having its invitations declined, with only France, Germany, Italy, Luxembourg and Spain so far agreeing to send their ministers to the hearings — unless the Greek crisis requires their presence elsewhere.

Margrethe Vestager, the European commissioner for competition, recently told the committee that her own investigations into the tax affairs of corporate giants are taking longer than expected, with member states hampering her efforts.

“It has become clear that obtaining information is both challenging and time-consuming,” Vestager told the committee.

This article was updated on July 9 at 5:06 pm to include a comment from IKEA.